Media Arts Group, Inc. v Rhino Intl., Inc.
Annotate this CaseDecided on January 12, 2005
Supreme Court, Nassau County
Media Arts Group, Inc., Plaintiff,
against
Rhino International, Inc., Defendant.
015856/03
F. Dana Winslow, J.
Plaintiff MEDIA ARTS GROUP, INC. moves for an order pursuant to CPLR §3213 directing the entry of judgment for the plaintiff and against defendant RHINO INTERNATIONAL, INC. in the amount of $75,188.57, with interest at the California legal rate, based upon a judgment secured in the State of California.
The underlying California action arises out of a dealership contract between the plaintiff, a publisher of art prints and other products, and defendant. The Dealer Agreement, executed in April of 2001 (the "Dealer Agreement"), authorized defendant to distribute plaintiff's products, in exchange for the defendant's purchase of a minimum quantity and compliance with certain payment and credit terms. Based, inter alia, upon defendant's alleged breach of the Dealer Agreement by failing to pay for goods ordered by and delivered to defendant, plaintiff commenced an action against defendant in the Superior Court of California, County of Santa Clara, on July 23, 2002 (the "California Action"). A default judgment was entered against defendant on February 11, 2003 by the Clerk of the Superior Court of California, County of Santa Clara, in the amount of $75,188.57. The instant motion seeks entry of judgment in New York against defendant, a New York corporation with an office in New York, based upon the California default judgment. [*2]
A default judgment entered in a sibling state is conclusive on the merits and entitled to full faith and credit in New York. Fiore v. Oakwood Plaza Shopping Center, Inc., 78 NY2d 572; Schulz v. Barrows, 263 AD2d 565. On a motion to enforce such judgment in New York, the only issue properly before the Court is whether the rendering Court had jurisdiction over the subject matter and the person of defendant. Id.
Subject matter jurisdiction is not at issue in this action. Here, the defense claims that the California court lacked personal jurisdiction over the defendant because (i) the defendant was not served with the summons and complaint in the California Action, and (ii) there is no basis for personal jurisdiction in California.
With respect to service, plaintiff has attached an affidavit of service in the California Action, which states that the summons and complaint were personally delivered to Patrick Longo, officer/agent of the corporation, at the corporate office in New York. Patrick Longo denies that he was ever served. In his affidavit, sworn to on November 12, 2003 (the "Longo Affidavit"), Mr. Longo states: "Either the process server served someone else or he made a mistake." Longo Affidavit ¶3. In reply, plaintiff submits the affidavit of Andrew Hayles, sworn to on January 20, 2004, who was the process server in the California Action. Mr. Hayles' affidavit describes in some detail the events surrounding the service of process, including his conversation with Mr. Longo, the physical characteristics of Mr. Longo, and Mr. Longo's acceptance of the papers on behalf of himself and the corporation. Mr. Hayles also certifies that the notes attached as an exhibit to his affidavit, corroborating the statements therein, are the notes he made contemporaneously with his service of process upon defendant.
In view of the substantial evidence proferred by plaintiff, the Court finds Patrick Longo's conclusory denial to be insufficient to raise an issue of fact regarding service of process in the California Action. See Dominican Sisters of Ontario, Inc. v. Dunn, 272 AD2d 367. The Court notes that Mr. Longo does not refute the process server's description of him, and thus leaves unchallenged the most cogent evidence that he was, in fact, served.
With respect to the basis of personal jurisdiction over defendant, a non-resident of California, this Court must look to the California long-arm statute, as well as the principles of Federal due process. Schulz v. Barrows, supra at 567. The analysis is two-pronged: the court must determine (1) whether the requirements of the California long-arm statute were satisfied; and (2) whether the defendant had minimum contacts with California such that the maintenance of the suit there does not offend traditional notions of fair play and substantial justice. City Federal Savings Bank v. Reckmeyer, 178 AD2d 503 (citing International Shoe Co. v. Washington, 326 US 310). See also Cucullu v. Lowe, 241 AD2d 474. (The Court notes that, for purposes of this determination, it need not refer to the choice of law provision contained in the Dealer Agreement, as that pertains to the substantive law governing the contract and not to the question of personal jurisdiction, which is procedural. Neither must the Court consider the forum selection provision, as that only applies to actions commenced by the dealer, and not to actions in which the dealer is the defendant.) [*3]
Section 410.10 of the California Code of Civil Procedure provides that "[a] court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of the state or of the United States." The California long-arm statute incorporates all of the traditional bases of jurisdiction over a corporation, including "incorporation or organization in a state, consent, appointment of an agent, appearance, doing business in a state, doing an act in a state, causing an effect in a state by an act or omission elsewhere, ownership, use or possession of a thing in a state, and other relationships to a state." Comment, Judicial Council, West's Ann.Cal.C.C.P. §410.10. The statute is as broad as is constitutionally permissible, extending "to the outermost boundaries of due process." Amplicon, Inc. v. Capital Vectors Inc., 236 AD2d 321 (quoting Rocklin De Mexico v. Superior Court of Placer County, 157 Cal. App. 3d 91, 94. In this case, the requirements of this statute are satisfied by virtue of the defendant's business transactions with plaintiff, which, at minimum, can be said to have had an "effect" in California. Cf. Amplicon, Inc. v. Capital Vectors Inc., (the effect of a corporate president's personal guarantee in inducing a California plaintiff to extend credit to the non-resident corporation was a sufficient basis for the exercise of long-arm jurisdiction over the corporate president/guarantor).
For purposes of "minimum contacts" analysis, it is not necessary to find that the defendant physically appeared in the forum state. Jurisdiction may be asserted where the defendant has "purposefully availed himself of the privilege of conducting activities within the forum State" and the controversy is related to or arises out of the defendant's contacts with the forum. City Federal Savings Bank v. Reckmeyer, supra, at 504. See also Cucullu v. Lowe, supra at 475; Hall v. LaRonde, 56 Cal. App. 4th 1342.
In this action, it is clear that defendant's contacts with the forum state were deliberate and purposeful, and that the controversy arose out of such contacts. Defendant contracted to purchase goods from a California corporation on an ongoing basis, and the dispute arose out of that contractual relationship. See City Federal Savings Bank v. Reckmeyer, supra (defendant's investing in Florida limited partnership was sufficient to establish minimum contacts in Florida where there was a nexus between such contacts and the cause of action); Cucullu v. Lowe, supra (defendant's contracting to purchase goods from Mississippi dealer was sufficient to subject him to jurisdiction in Mississippi where the action arose out of defendant's failure to pay for such goods). See also Hall v. LaRonde, supra (use of electronic mail and telephone by non-resident may be sufficient to establish minimum contacts where non-resident has created "continuing obligations" between himself and residents of the forum). Accordingly, the California court's assertion of jurisdiction over defendant satisfies the requirements of due process.
Defendant attempts to defeat summary judgment by demonstrating the existence of a meritorious defense. As discussed above, however, that issue is not properly before the Court. Upon the determination that the forum state had jurisdiction to render judgment, the judgment is entitled to full faith and credit in New York, and inquiry into the merits of the underlying dispute is foreclosed. Fiore v. Oakwood Plaza Shopping Center, Inc., supra. To the extent that defendant had any legitimate defense to the California Action, its remedy was to seek vacatur of the default judgment in California. [*4]
Finally, defendant opposes this motion on the ground that plaintiff misnamed the corporate defendant in both this action and the California Action. According to Patrick Longo, "Rhino International, Inc." is not the name of the corporation appearing in this action, but rather, is the name of an unrelated Delaware corporation. The correct name of the corporation is "Rhino Jewelry International, Inc." Patrick Longo does not deny, however, that he signed the Dealer Agreement as President of Rhino International Art, and that his corporation was, in fact, the entity that engaged in the transactions with plaintiff which were the subject of the California Action. Accordingly, defendant cannot deny that it is the proper party defendant in both this action and the California action. Further, as shown in exhibits to plaintiff's reply, Patrick Longo has contributed to the confusion regarding the corporate name by signing documents on behalf of "Rhino International" or "Rhino International, Inc.," by failing to correct invoices sent to "Rhino International, Inc.", and by using letterhead and checks imprinted with the name "Rhino International Art." Thus, to the extent that the defendant was misnamed in the caption, the defect is technical in nature and non-prejudicial to defendant, and may be corrected by the Court upon proper application, including proof of the correct corporate name. The denial of summary judgment is not warranted on that basis.
Based upon the foregoing, it is
ORDERED that plaintiff's motion for summary judgment pursuant to CPLR §3213 is granted. Submit judgment on 10 days notice.
This constitutes the Order of the Court. Plaintiff shall serve upon defendant a copy of this Order with Notice of Entry forthwith upon receipt from any source.
ENTER:
Dated: January 12, 2005_____________________________
J.S.C.
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